Energy management is the new battleground for technology companies. Sophie
Curtis dissects their tactics

Heating has always been regarded as a dumb utility. Some people may have a thermostat in their home, but after programming the thermostat when they first move into their house, most people promptly forget about it and never touch it again.

Over the past few years, however, the price of electricity and gas in the UK has skyrocketed, rising by more than a third since October 2010. Many consumers are now taking a fresh look at their energy consumption, exploring new ways to save money.

Around 60 per cent of the energy consumed in the home is for central heating, which has traditionally been controlled by unintelligent technology. However, a new wave of smart energy management systems is starting to transform the market.

At the start of the year, Google made headlines when it bought California-based Nest Labs, a home automation company that designs and manufactures smart thermostats and smoke detectors, run by iPod-inventor Tony Fadell, for $3.2 billion (£2bn).

Analysts interpreted the acquisition as a bid by Google to tap into the fast-growing trend for home automation and the 'internet of things', signalling a new battle ground for tech companies.

Nest's learning thermostat arrived in Britain at the start of April, but it is by no means the only smart energy management offering in the UK. Since September 2013, British Gas has offered a system called Hive, that lets users control their heating remotely from a mobile device.

Newbury-based PassivSystems also develops software that helps consumers manage heating costs, claiming to deliver an average 23pc saving to an annual heating bill, and Munich-based tado° sells its smart heating control software in the UK. Honeywell also sells smart thermostats for individual radiators.

British Gas' Hive

The idea of intelligent thermostats is to help users save energy, and therefore money, through a much smarter home heating system. At the same time they make everyday life easier and the user’s home more comfortable.

There are two schools of thought on how to approach this. One is to put complete control in the hands of the users, letting them adjust their central heating settings remotely from a computer or mobile device, and the other is to adjust the temperature automatically to match the residents’ daily routine, with little or no user action required.

British Gas' Hive falls into the first camp. Its Active Heating system focuses on a remote control enabling the customers to interact with their heating system via a smartphone, tablet or laptop.

British Gas claims that 7.8 million empty homes are being heated every year. Hive lets users set a heating schedule for each day of the week via a mobile app on their iOS or Android device, and then check or adjust the temperature from the app whenever and wherever they want to.

Kass Hussain, director of technology at Hive, said that, when it comes to smart energy management, there is still a low level of product category awareness.

"People aren’t necessarily comfortable with it, and the thing we’ve heard time and time again is, I want to be in control – that word control. I want to control my thermostat, not necessarily be controlled by it, or any other high automation device," he said.

"I was quite surprised to discover how creepy some people actually found it. So we’ve been quite disciplined. There’s no shortage of engineers and techies and product managers here that want to cram it full of stuff. Our challenge going forward is to keep it as simple and intuitive as it can be, and not feature-cram it."

Hive runs out of a separate office from British Gas and has its own product managers and engineers, but it is thanks to the organisation's relationship with British Gas that it has managed to gain a headstart over other intelligent thermostat companies in the UK.

Hive has a ready-made customer base within British Gas, where it is appropriate to sell its product. Consumers also trust the British Gas brand, according to Hussain, meaning they feel comfortable letting engineers into the house to install the Active Heating system.

"Given that we’ve got 11,000 engineers making roughly 50,000 visits a day, all of whom are gas and electric safe, I don’t think there are many people that are more qualified to understand what goes on in these homes," he said.

However, British Gas isn't ruling out the possibility of adding more 'intelligent' features to Hive in the future.

"I think we need to take customers on a journey, so step one for us was to take what you’ve got on your wall today, which is that thermostat, and put that into customers’ hands so they can use it remotely," said Hussain.

"Step two is when people start getting au fait with that, then start suggesting things to them – Did you know that you could save money by knocking the temperature down one degree? Did you know that the schedule you’ve got in the evening isn’t necessarily the most optimised schedule?

"The third step is to let Hive take away managing some of the things that you may not want to do. Now you trust us, now you’ve used the app for a little while, now you know what the bounds of it are, now we may start offering you automation. I think it will work for some people, it won’t work for all people, and again I think we’ll leave that choice in consumers’ hands."

Google's Nest Labs

Google-owned company Nest Labs goes one step further. Its Learning Thermostat not only allows the user to control the heating system remotely but also learns the customers’ habits in the first few days and builds a personalised schedule.

Nest encourages users to adjust the thermostat's temperature whenever they feel uncomfortable. Every time they tweak the settings, Nest takes note and is able to guess more accurately what they will want the next time around. The idea is that, eventually, the user will never need to touch it.

The thermostat features a motion sensor that can detect when the house is empty and automatically turn down the temperature, helping to save energy. Users can adjust the temperature manually or via their laptop, smartphone or tablet, however far away from home.

Nest is teaming up with npower in the UK to offer the thermostat to millions of customers, going head-to-head with British Gas and Hive. It can also be bought directly from Apple, Amazon, B&Q, John Lewis and the Nest UK website, although professional installation is highly recommended.

"Everyone’s first demand from a thermostat is comfort and control, so even if you set an inefficient temperature or use energy when it’s most expensive, the Nest Learning Thermostat will always listen to you," said Nest founder and CEO Tony Fadell in a recent blog post.

"However, Nest can do a lot more than just follow your lead. With new Auto-Tune technology, Nest can spot perfect, personalised opportunities to save you money and energy and automatically take advantage of them for you."

PassivSystems

PassivSystems offers a similar mixture of control and automation with its home energy management system. Unlike Nest, however, it does not try to second-guess the residents' movements. Instead it focuses on physical and environmental factors that affect the need for central heating.

The PassivLiving system uses algorithms to learn about how the building behaves in the context of the outside weather conditions, the equipment in the home, and how long it takes to reach a particular temperature. Based on this learning, it is then able to deliver a particular temperature to the customer at a given time.

"Say you want to get up to a house at 18 degrees at 7am, then we will only fire the equipment when it’s necessary in order to reach that temperature at a given time. So on a warm morning of course you need less time to achieve it than on a very cold morning," said Colin Calder, chief executive of PassivSystems.

"Then we can also anticipate when you are going to perhaps move from a high temperature period to a lower temperature, so when you go to bed for example, so we don't overheat the house."

Calder said that all of the company's R&D has gone into optimising the performance of the equipment, and extracting as much value out of the equipment fat minimum cost, rather then trying to second-guess the user's occupancy.

"We think actually that’s something that can be done in the future, but getting the consumers the best value proposition right now is the most important thing, because we all know what’s happened to energy prices in the last few years."

PassiveSystems is entirely software-based, and customers pay an ongoing subscription fee in exchange for regular software updates and new features. The company says it is working with a number of different retailers and energy companies to deliver the system, but was not able to give any names.

tado°

Of all the home energy management offerings on the market, tado° is the most hands-off. The tado° algorithm adjusts the temperature automatically, based on the residents’ daily routine, with no user action required.

After installing and making some basic settings, tado° works like a personal heating assistant, and trains itself how to heat up the building in the most efficient way. It detects where the residents currently are and controls the temperature accordingly.

They system works using location data on residents' smartphones to detect when the last person has left the house. A signal is then sent to the heating system to turn down the temperature. As soon as one of the residents starts to head home, tado° reacts immediately and warms up the house to the desired temperature.

tado° also takes current weather forecasting data and building characteristics into account.

“We want to make everyday life easier. People shouldn’t have to deal with their heating so we have developed the tado° heating app that takes care automatically”, said Christian Deilmann, founder and CEO of tado°.

"People have enough high-quality screens at home – like computers, smartphones, tablets – and hence that it is not necessary to hang another display on the wall. tado°'s intelligence is in the cloud but can be reached from any internet-enabled device”

The company claims that around 80 percent of UK customers install tado° themselves, without the help of an engineer. However, there is also an option to book an extra installation service.

Customers can buy the tado° solution for £249 or to rent it for £6.99 on a monthly contract. The company claims that consumers can lower their heating costs up to 26 per cent.